In response to a spate of insider revelations of corporate wrongdoing in recent years, the Cabinet endorsed a bill Tuesday to protect whistle-blowers from employer retaliation under certain conditions.
The government is aiming for Diet passage of the bill before the current session ends June 16, enabling it to take effect as early as April 2006, government officials said.
The bill would prevent employers from penalizing employees through dismissal, demotion or salary cuts for only revealing illegal corporate behavior that runs counter to the public interest.
But the definition of whistle-blowers to be protected under the legislation was narrowed from an original draft issued last year. The watered-down version is apparently deferring to the interests of the business community, which feared revelations of corporate wrongdoing would increase if whistle-blowers were broadly protected.
Consumer groups and legal experts have expressed concern that the legislation may in fact discourage whistle-blowers.
Major corporate misdeeds exposed by whistle-blowers include the 2002 revelation that the now-defunct Snow Brand Foods Co. falsely labeled imported beef as domestic to defraud the government buyback scheme for domestic cattle hit by mad cow disease, and the failure of Asada Nosan Co. to report a massive outbreak of bird flu last month at one of its poultry farms in Kyoto Prefecture.
The proposed bill is supposed to protect current and retired employees, including temporary staff, at companies and their business partners, as well as civil servants.
They will be protected for reporting what they believe are illegal acts to in-house company organs, public administrators, the media and consumer protection groups.
But reports to media and consumer protection groups are permitted under the bill only if the whistle-blowers fear the companies will destroy evidence.
The government envisages that the bill will protect whistle-blowers for reporting what they believe to be violations of any of seven specific laws, including the Penal Code, the Securities and Exchange Law, and the Food Sanitation Law, the officials said.
The government plans to increase the number of laws to be covered by the bill to several hundred by the time it takes effect, they said.
The law will not take effect for two years to give the government time to fine-tune an expanded list of laws and for all parties involved to be well-prepared for the new measures. The bill also stipulates that the new law be reviewed five years after taking effect.
The bill has been watered down from an earlier version drafted by the Cabinet Office last year, narrowing down the opportunities for whistle-blowers to come forward.
The final draft stipulates that protection is warranted when “a criminal act is about to take place,” instead of when one is “feared to take place” as in the initial draft.
The opposition camp, led by the Democratic Party of Japan, criticized the bill Monday as insufficient due to the limits imposed.
The Asada Nosan Funai chicken farm in the town of Tanba, Kyoto Prefecture, came under harsh public criticism for failing to report mass chicken deaths for about a week. The prefectural government inspected it Feb. 27 only after receiving an anonymous tip.